A Survey On Marketing Characteristics and Production System Strategies-Case Study: Cans Production

International Journal of Engineering Research
Volume No.4, Issue No.9, pp : 510-517
ISSN:2319-6890)(online),2347-5013(print)
01 Sept. 2015
A Survey on Marketing Characteristics and Production System

Strategies-Case Study: Cans Production
Laleh Tashakori1, Abouzar Arabsorkhi2
1
Department of computer engineering,
Islamic Azad University, Yazd Branch, Yazd, Iran
2
Iran Telecommunication Research Center (ITRC), Tehran, Iran
Keyword- Production strategies; Knapsack; Decision system;

drink production.
I.
INTRODUCTION
Manufacturing companies utilize diverse production policies to
satisfy the customers demands. The most applicable production
policies are Make-To-Stock (MTS), Make-To-Order (MTO),
Assemble-To-Order (ATO) and Engineer-To-Order (ETO). Each
policy has some specific advantages and disadvantages. Among
them, MTS and MTO systems have been widely used in the
production companies.
The manufacturing systems are the charge of realization to
produce different kinds of productions. According to whether the
product is common or specific, the adopted policy of
management will be different. When a product is defined
properly and developed, it belongs to on-catalogue products.
The manufacturing is managed according to MTO (make-toorder), MTS (make-to-stock), or ATO (assemble-to-order)
policies. However, when the product is specific with particular
customer requirements, a project to develop new product should
launched by the focal company. Subsequent of the customers
order, the focal company have involved in designing,
developing, industrializing and manufacturing product [1]. This
class of manufacturing systems called Engineer-to-Order (ETO)
is considered to be time consuming (Ali, 2000) due to the
necessity of requirements gathering, checking of components
availability, quoting, engineering and feasibility assessment,
designing, etc (Figure 1).
The scheduling practice in high value added manufacturing
companies, competitive environment has been to release the
manufacturing order before the customer order is released
(forecast based), and subsequently match incoming customer
Page 510
orders to units in progress. As a result, there is the possibility of

either getting more orders than can be accommodated causing
the rejection of some, or getting too few orders leading to a
finished unit without a buyer which is termed an "orphan"[2].
The physical size and financial value of the units make storing of
the orphans highly undesirable[3].
This scheduling practice is an special hybrid of the make-toorder (MTO) and make-to-stock (MTS) production strategies. It
is not the typical ATO situation, although in both a forecast of
end items is made and in both the actual customer orders come
in before the end products are completed. In the ATO situation
the build process stops at a predetermined point and WIP
inventories are held until customer orders arrive. In high value
added manufacturing company production operations
management, there is no stopping point in the production
process and buffer inventories are avoided. Customer orders
arrive throughout the production process and are matched to
items in any state of production. Therefore, it permits both early
and/or late customization and thus, offers a higher degree of
customization than ATO (Figure 1). Also, volumes are much
lower than in ATO [3]. This scheduling practice was initially
labeled in the literature as Build-to-forecast (BTF)[1,3], and later
on renamed as Make to forecast (MTF)[2,4,5,6,7].
Relative changes in
demand
Abstract.- The companies try to obtain competitive advantages

by producing customized products which meet customers
requirements. In addition, they ought to utilize their maximum
capacity and reduce storage costs. According to the demand of
product, selecting the appropriate production strategy can help
to achieve these goals. In this paper, we examine the market to
identify competitors. Then, we examine different strategies and
present a model for selecting production strategy. The idea of
the algorithm "Knapsack" is used to select production strategy.
Moreover, we have attempted to utilize simple numerical
method for solving model. We interpret the diverse production
strategies such as, MTS, MTO, ATO and ETO. Finally, the
numerical experiments reveal to show the advantages of the
applied mathematical programming model.
High
MTO
ETO
Low
MTS
ATO
Low
High
The relative production

complexity
Fig.1 Adapt Industry to production methods
Consequently, these production operational strategies have
been referred as floating decoupling points systems[8] in
contrast to traditional fixed decoupling points systems i.e. ETO,
MTO, ATO, MTS [9,10].
Iron and aluminum are two of the major components of earths
crust. Estimated reserves of iron ore and bauxite amount to 180
billion and 28 billion tons, respectively [15,16]. These two base
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metals also define two large industrial branches, which leads to
the extensive processing of these ores into metallic products. As
a consequence of this extensive technological, activity, metallic
residues, known as scrap, are produced. These scraps, produced
during the processing of the metal are known as new (or prompt)
scrap and have a higher value than old (or post-consumer) scrap.
The scientists of Coca Cola Company, and the independent
scientists with whom we have consulted, have thoroughly
reviewed the data and have assured us that our beverage cans
pose no public health risk. In addition, government regulators
around the world have reviewed the science independently and
have repeatedly stated that current levels of exposure to BPA
through beverage packaging pose no health risk to the general
population, including children.
Our top priority is to ensure the safety and quality of our
products and packaging through rigorous standards that meet or
exceed government requirements. If we had any concerns about
the safety of our packaging, we would not use it.
Why choose cans?
Cans from Ball Corporation are a sustainability success story
as they are lightweight, contain an average of 68 percent
recycled aluminum and are infinitely recyclable. Cans are the
number one recycled beverage container of any kind in the
United States.
Cans are airtight and oxygen-free and cool down faster than
any other beverage container resulting in a fresher, better taste.
Cans take up less space than a bottle, allowing for more
compact shipping.
Cans are a great way to differentiate brands in displays and
on the shelf, offering a 360- degree mini-billboard.
Cans have superior portability and dont shatter [17].
New research shows that the overall consumer perception of
drinks cans have improved since 2007, with cans of soft drinks
and beer seen as offering good value for money and
freshness, as well as delivering a recyclable pack which is
easy to drink from. According to the research conducted by
GfK on behalf of the Can Makers, cans are also seen to contain
the right amount of drink and to keep a drink colder.
72% of respondents think drinks taste fresh in cans,
compared with 51% in 2007. 49% of respondents also think that
cans are good value and 55% think cans contain the right
amount of a beverage, compared with 42% in 2007. In the case
of beer, Medium and Large cans are the most popular. For
Carbonated Soft Drinks (CSDs), single serves in medium and
large multipacks are the most popular. All age groups are
drinking from cans more often, but particularly males and 14-17
year olds, where 75% are choosing cans compared with 62% in
2007. The results also show that more people than ever before
are drinking from cans on the move.
In this model, the idea of a Knapsack algorithm is used.
Suppose that we want to fill our knapsack with the things may
choose from a variety of devices that provide maximum comfort
for ours. In the following, we have n kinds of items, 1 through n.
Each kind of item i has a value vi and a weight wi. We usually
assume that all values and weights are nonnegative. To simplify
the representation, we can also assume that the items are listed in
increasing order of weight. The maximum weight that we can
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01 Sept. 2015
carry in the bag is W. Its objective function leads to the
maximum value.
This paper has been organized as follows: Production strategy
selection model is presented in Section 2. In Section 3, a case
study is illustrated. In the first phase, we assess competitors.
Then, the decision model is determined by a linear programming
model. Finally, conclusions are presented in Section 5.
II.
A.
MANUFACTURING MODEL
Parameters and variables in the model
Max profit:Total score which is obtained according to the decision

algorithm.
d=1,2,,D: The criteria for selection
j=1,2,,J: Products
Wd=[d1, d2dD]: Organization's the value of the vector.
Bd=[ d1, d2dD]: Market's the value of the vector.
Cu: Auxiliary variable.
M: The maximum investment for selection.
Xd: If Wd Cu then Xd = 1 else 0 Xd < 1
Profit: The value obtained for the decision according to criteria
d.
B. Mathematical formulation
Step 1.Recognizing market and competitors:
The company should strive to collect information about your
competitors to achieve a marketing competitive, efficient and
effective policy. The company ought constantly to compare
products, prices, sales distribution channels and advertising to
promote its close competitors. For this purpose, the companies
will be able seeking to enhance their potential competitive
advantages.
It seems like a simple task to identify a company's rivals. The
company's competitors can know the companies which sell
products and services at prices comparable to similar customers;
however, we must accept this fact that companies are faced with
a wide range of competitors. Generally, a company can define
all his rival companies that produce similar goods or class of
these goods of company. It means that the competition can
include all companies which are competing for dollars with the
same consumers.
The companies can identify their competitors by two ways:
Industry perspective: Many companies determine their
competitors by analyzing industry perspective. The industry is a
set of institutions that the supplier's goods are another
alternative. Automotive, oil, pharmaceuticals and beverages are
examples of this definition. If an industry increases price of a
commodity, the demand will increase for other goods.
Market perspective: In this case, competitors have the
same customers or serve to the customer groups. Overall, market
perspective opens the gate to the company to know better their
actual and potential rivals and do long-term planning for the
market.
Step 2.Determining production policy by key factors:
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01 Sept. 2015
Firstly, the internal and external factors directly affect on the

selecting strategy to produce the identified product. Muda and
Hendry introduced 14 principles which offer a way to implement
MTO strategy in a manufacturing system [11]. According to
these essential rules and some other suggested ideas by
researchers such as: Schonberger, Hays and Clark and Olhgar
are presented methods for the MTO, MTS, ATO and ETO
decision [9,12,13,14]. These criteria are shown in Table 1(vector
d=[d1, d2, d3].
We divided criteria into three groups as follows:
1. Product
2. Customers and Suppliers
3. Internal factors
Then, we are calculated the algorithm that are presented for
each group.
Step 3.The weighted criteria:
B & W vectors are creating criteria. Vector W is a company's
current and products and vector B is competitors's current and
their products.
Very Low=1 , Low=2 , Medium Low=3 , Medium=4 , Medium
High =5 , High=6 , Very High=7
Step 4.Prioritizating criteria:
In order to express the criteria for selecting which will be B or
W and the vector which are superior to select criteria, for each
B
criterion in the above vectors obtains ratio d Based on the
Wd
B1 B2
B
D We evaluated the model.

W1 W2
WD
Each measure is bigger than it is the excellence criteria. If this
ratio is equal for two criteria which are selected, the vector D is
expressed.
Step 5.Determining investment rate:
Variable M is the investment company for the production of
policy. Being able to control the available amount of assets for
each stage, we use the variable Cu. X d is a control variable. If
W d Cu be established, X d 1 will otherwise 0 X d 1
will.Variable Profit shows how many points in each stage.
For each product to be resolved under the model with initial
values:
Xd 0 , Profit 0 , Cu M .
D
M Bd
(1)
d 1
The companies usually determine due to market conditions and

competitors that they need to compete. Therefore, the
competitors can determine the rate of investment for each
criterion acquire in this sector (Eq. 1).
Step 6.Computing profit according to the investment rate:
Until the score of assets is lower than the criteria case (W d Cu
) we have:
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Profit Profit W
(2)
Xd 1
(3)
Cu Cu Bd
(4)
Xd Wd M
(5)
Profit is the total score what the company acquires according

to each criteria (Eq. 2). Whenever, we add score of criteria to
Profit, we will consider Xd 1 to control the situation of
algorithm(Eq. 3). After reviewing the criteria, we will lower its
criteria score from total assets. Therefore, we will be amount of
the remaining assets for reviewing other criteria (4). We use the
Eq. (5) to control measures that have been review. We do this
stage to remain assets that may not be enough for the next
criteria.
Step 7.Final Profit:
X d Cu
Bd
MAXProfit Profit Xd Wd
(6)
(7)
At this stage, we will review next criteria only much as assets

that are available; because we do not have enough investment
for other criteria. MAX Profit is represents a privilege for firm
what intended to conditions obtains with regard to measures and
it is used to select manufacturing policy MAX Profit should be
calculated for each three groups of criteria.
This classification helps to get more and deeper understanding of
the situation ahead of the company.
Also, if the company
desires to use a combination of policy, these categories can aid
in this decision. For instance, company facilities to get in 3-point
ranges in MTO and in a group within the MTS, MTO policy
which is selected but it able to use the strategy of combining
MTO and MTS (Table 2).
The implementation of the algorithm is shown in figure 2.
CASE STUDY
A.
Introducing Product
More than forty years, the aluminum containers make up the

major part of materials in the packaging industry. The metal
abundance as natural, inherent properties, heat tolerance and
recovery has led to use for packaging materials. On average,
40% of total packaged consumer drinks make up the aluminum
cans. By simplest definition of the product, we can say that steel
cans are used for storage and consumption of beverages at once.
They have ability to maintain content along with their properties,
light weight, portability, style, good printing capabilities, ability
to properly collect and recycle.
Goods that can be used as a good alternative:
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Plastic bottles
Glass Bottles
Due to weight and fragility functions, glass bottles lose many

of its advantages compared to cans. The plastic bottles can also
be said given the raw material for this product soil and oil
products, due to the numerous environmental benefits, using less
oil. In some parts of the world, they are advisable to use less.
Products which are available in cans include:
Non-alcoholic beer and non-greed

Soft drinks
Juice
Energy drinks
Soda
Sparkling water
Dough (Iranian drink)
Milk
Hot drinks like coffee, cappuccino
Types of canned fruit
In this paper, cans are divided into three categories base on the
products are available in their:
1. Cold drinks cans (Product 1)
2. Fruit cans and food cans (Product 2)
3. Warm drinks cans (Product 3)
B. Market Survey
Nowadays, the total intake of drinks cans has grown to more
than 220 billion pieces. The share of North American consumers
have been 114 billion number that has been to the total used
elsewhere. Europe, Asia, South America and Australia have the
highest consumption after North America (Figure 3).
Market for drinks cans has a high growth in some parts of the
world. The following table shows the total consumption and per
capita consumption of this product around the world (Table 3).
Nowadays, 45% of world carbon dioxide drinks are served in
cans. The proportion of alcohol is about 30%. The global market
for packaging products has been growth 4% in the past decade.
In the cans industry, diversification of products is low.
Production environment is a continuous. Product is based on
the prediction. While production of the final product is
delayed to the customer, the order is received. Competition in
this market is limited to companies which have this product in
the market in during years. Flexibility of equipment and
human resources is high. Return on investment is appropriate.
VI. CONCLUSIONS
Selecting production polices are difficult given the qualitative
and quantitative criteria. This research is done in two phases. In
the first phase assess pay competitors in a competitive
environment. The second phase will select production polices.
Advantage of this algorithm can be pointed to the following:
Strategic visions in selecting production polices and identify
competitors consider the qualitative and quantitative factors
together, considering the processes and types of products.
In this study, a multilevel supply chain is considered. In the
supply chain decisions about inventory levels by producers in
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01 Sept. 2015
A few companies utilize major producers of cans. These
companies have achieved the expertise over time and synergy
between the various components of its production. Due to the
high-scale production, these companies have been formed
benefit from the significant advantage.
Historically, after the formation of cans producers in the world
market, the first wave of mergers and acquisitions appending in
the world, SMEs were buying small companies which have
produced cans. The second wave occurred in the 90s, large
companies of cans bought the industry's SMEs. After this merge,
Rexam, Crown Cork & Seal, Ball Corporations screwed up as
the big three manufacturers cans in the world (Table 4).
Table 4 Market share of active companies in the production of
cans in the world
Name of Companies
Share
Rexam
24%
Ball
21%
Crown
17%
Metal Containers
12%
Local Companies
31%
In the late 80 sand early 90s, there were a few manufactures

that can produce cans in the world. After that, this industry in
some markets such as Europe, America and China has been
stable. The main reason for the lack of reception of this product
in other countries has been related to the economic and level of
development in those countries. But recently, due to the
relatively high growth global economy gradually, other
developing countries join to the consumer beverages which are
served in cans.
We show active units in the Middle East in the table5 to
demonstrate the capacity of markets and export for Iranian
companies
in
the
field.
The final cost of the product is a direct relationship with its

quality; however, in the market is determined by standard
quality.
According to the results of the algorithm, for all three
products must be used ATO policy. Since the production of
cans is in the field of the packaging industry. In this industry,
suitable production policies is ATO (Table 6 and figure 4).
the central and producer answer the needs of retailers. Producer
works according to the production policy selected with a finite
rate and determined to respond to the needs of retailers.
Although, much of the research in the field of production
planning and control systems are MTS or MTO but many
companies to reduce their production costs and improve
customer service are used production of other policies,
especially combination policies. In this study, we were trying
providing model to meet companies what is generated with
different policies. This algorithm can be easily implemented
with a spreadsheet package and its computation is fast.
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01 Sept. 2015
Therefore, the proposed model can be applied easily in practical

situations. Expertise, experience, authority, and the
responsibilities of decision makers are not equal in practice.
Furthermore, in the mathematical model, the weights of internal
and external criteria are determined by decision makers. It is
useful to propose a scientific method for determining these
weights. In future research can be added a combination policies
to this model.
REFERENCES
i.
McCutcheon, D.M., Raturi, A.S., Meredith, J.R., 1994, The
customization-responsiveness squeeze. Sloan Management Review.
ii.
Akinc, U., Meredith, J.R., 2006, Choosing the appropriate capacity
for a make-to-forecast production environment using a Markov analysis
approach. llE Transactions , 38, pp. 847-858.
iii.
Raturi, A.S., Meredith, J.R., McCutcheon, D.M., Camm, J.D. , 1990,
Coping with the build- to-forecast environment. Journal Of Operations
Management , 9, No. 2.
iv.
Meredith, J.R., Akinc, U., 2007, Characterizing and structuring a new
make-to-forecast production strategy. Journal of Operations Management , 25,
pp. 623642.
v.
Akinc, U., Meredith, J.R., 2009, Modeling the managers match-orwait dilemma in a make- to-forecast production situation. Omega, 37, pp. 300
311.
vi.
Brabazon, P.G., MacCarthy, B., 2005 , Review of order fulfilment
models for catalogue mass customization. Appears in: Mass Customization:
concepts, tools, realization.
vii.
Brabazon, P.G., MacCarthy, B., 2004, Virtual-build-to-order as a
mass customization order Fulfilment Model. Concurrent Engineering. Research
and Applications, 12, pp 155 165.
viii.
Brabazon, P.G., MacCarthy, B., 2006, Fundamental behaviour of
virtual-build-to-order systems. International Journal of Production Economics,
104, pp 514 524.
ix.
Olhager, J., 2003, Strategic positioning of the order penetration
point. International Journal of Production Economics, 85, pp. 319329.
x.
Rudberg, M., Wikner, J., 2004, Mass customization In terms of the
customer order decoupling point. Production Planning & Control, Vol. 15, No.
4, pp. 445-458.
xi.
Muda, S., Hendry, L., 2002, Developing a new world class model
for small and medium sized make-to-order companies. International Journal of
Production Economics, 78, pp 295310.
xii.
Schonberger, R.J., 1996, World Class Manufacturing: The Next
Decade. New York : Free Press.
xiii.
Hayes, R.H., 1988, Wheelwright, S.C., Clark, K.B. Dynamic
Manufacturing: Creating the Learning Organization. Free Press, New York.
xiv.
Blecker, Th., Friedrich, H., 2005, Proceedings of the international
mass customization meeting . IMCM05.
xv.
[15] Bray EL., 2011, Bauxite and alumina. In: U.S. Geological
Survey, Mineral Commodity Summaries [Internet].
xvi.
[16] Jorgenson DG, Iron O. U.S., 2011, Geological Survey, Mineral
Commodity Summaries [Internet].
xvii.
[17]. Ann T. Scott, 2012, Hiball Energy Moves to Sustainable 16-oz.
Aluminum, Hi Ball company.
Table 1 Criteria
Product
Customers and
Suppliers
Internal factors
Page 514
Factors
ETO
MTO
ATO
MTS
Obsolescence risk
D1
5-6
3-4
1-2
Product quality
D2
5-6
3-4
1-2
Product design
D3
5-6
3-4
1-2
Fluctuationsin demand
D4
5-6
3-4
1-2
Product variety
D5
5-6
3-4
1-2
Product complexity
D6
5-6
3-4
1-2
Cost of product
D7
5-6
3-4
1-2
Commitment tocustomer
D8
5-6
3-4
1-2
Commitment to Supplier
D9
5-6
3-4
1-2
Customer feedback
D10
5-6
3-4
1-2
Human resources Flexibility
D11
5-6
3-4
1-2
Rewards, recognition and pay system
D12
5-6
3-4
1-2
Equipment of flexibility
D13
5-6
1-2
3-4
Integrating the functions of

production and marketing
D14
5-6
3-4
1-2
Information flow
D15
5-6
3-4
1-2
Technology
D16
5-6
1-2
3-4
Maintenance and support
D17
5-6
3-4
1-2
Return of investment
D18
5-6
3-4
1-2
Up buying
D19
1-2
3-4
5-6
Delivery lead-time
D20
5-6
3-4
1-2
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01 Sept. 2015
Table 2Important criteria for affecting decision

Factors
Product
Customers
and Suppliers
Internal
factors
Risk of obsolescence
D1
Product quality
D2
Product design
D3
Fluctuations in demand
D4
Product variety
D5
Product complexity
D6
Cost of product
D7
Commitment to customer
D8
D9
Customer feedback
D10
D11
Rewards, recognition and pay system

Integration the functions of production and
marketing
Information flow
Technology
Upbuying
Delivery lead-time
D12
D13
D14
D15
D16
D17
D18
D19
D20
ETO
MTO
ATO
MTS
More
than 41
16-30
31-40
Less
than 15
More
than 19
13-18
7-12
Less
than 6
More
than 60
40-59
30-39
Less
than 29
Fig.2 Schematic model
Page 515
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Central Asia
3%
01 Sept. 2015
East Asia
11%
Africa
3%
South
America
6%
Australia
6%
North
America
53%
Europe
18%
Fig.3 Total consumption in the world

Table 3 Total consumption and per capita consumption of this product
Area
Consumption(billion)
Per capita
consumption(number)
North
America
Europe
South
America
Africa
Central
Asia
East
Asia
Australia
114
38
14
24
12
400
73
14
Table 5Active companies in the production of cans in the Middle East

Company
Country
Place
Location
Plan
Number of lines
Rexam
Egypt
Cario
1/Style
Kaveh
Iran
Tehran
2/Aluminum
Caniel Beverage Packaging
Israel
Telaviv
1/Style
Crown Middle East
Oman
Jordan
3/Aluminum
Crown
Qzaqzstan
Almaty
1/Aluminum
United Beverage Co.
Kuwait
Kuwait
1/Aluminum
Crown Arabian can
Saudi Arabia
Aldmam
2/Aluminum
Crown Jeddah can
Saudi Arabia
Jadah
3/Aluminum
Southern Can Making Co.
Saudi Arabia
Jadah
2/Style
United Arab Can
Saudi Arabia
Aldmam
2/Style
Algamia
Saudi Arabia
Riyadh
Consolidated Can
Manufacturing Co.
Saudi Arabia
Jadah
Abuldajadel Beverage
Saudi Arabia
Jadah
1/Aluminum
Crown Maghreb Can
Tunisia
Tunisia
1/Aluminum
Crown
Turkey
Izmir
2/Aluminum
Rexam
Turkey
Manys
2/Aluminum
Crown Emirates Co.
UAE
Dubai
2/Aluminum
Can Park
UAE
Dubai
1/Aluminum
The total number of lines
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1/Style &
1/Aluminum
2/Aluminum
31
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01 Sept. 2015
Table 6 Algorithm results
Factors
Product1
Product2
Product3
30
20.66
37
9.33
12
12
35
37.25
31.2
Risk of obsolescence
Product quality
Product design
Product
Fluctuations in demand
Product variety
Product complexity
Cost of product
Commitment to customer
Customers
and Suppliers
Customer feedback
Internal
factors
Rewards, recognition and pay

system
Integration the functions of
production and marketing
Information flow
Technology
Up buying
Delivery lead-time
90
80
70
Profit
60
50
40
30
20
10
0
ATO
MTO
MTS
ETO
Product 1
80.2
Product 2
32.66
20.66
Product 3
44.33
30
Fig.4 Algorithm results
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International Journal of Engineering Research

Volume No.4, Issue No.9, pp : 510-517